Michael Noonan insists USC can be phased out entirely over five years

Minister for Finance confirms Budget 2017 will have around €1bn to play with

Michael Noonan insists USC can be phased out entirely over five years

Finance Minister Michael Noonan holds a copy of the Comprehensive Expenditure Report at Government Buildings in 2015 | Image: RollingNews.ie

Minister for Finance Michael Noonan has confirmed that Budget 2016 will be on Tuesday, October 11th.

He also indicated that there will be around €1bn available, with around two-thirds being used for public spending, and one-third for cutting taxes.

Speaking to the Oireachtas budgetary oversight committee, Minister Noonan insisted that it would still be possible to phase out Universal Social Charge (USC) entirely in five years.

He said it is still his objective to get rid of the charge, as there is no longer a financial emergency.

Mr Noonan is appearing before TDs to discuss ideas for raising more money in the budget next month.

The USC will not be scrapped entirely over the course of the three-year deal with Fianna Fáil, but could still go within five, he told deputies. 

"I'm saying that it will not be possible to phase out USC completely over a three-budget cycle.

"But it would be possible to phase it out over a five-budget cycle, understanding that after the fifth budget was in place there'd still be a tail on it - going into, say, 2021."

He also said that the minority government is going to be prudent:

It comes as Fianna Fáil leader Micheál Martin says it is important that pensioners get "some recognition" in this year's budget.

Ahead of the election, the party pledged to increase the state pension by €30 a week over a five-year period.

Finance spokesperson Michael McGrath has called for a €5 increase this year.

In his committee appearance today, Minister Noonan also said that diesel car owners will not be hit with a major rise in the price at the pumps after the budget.

It had been proposed to the Finance Minister that the price of petrol and diesel should be equalised. 

Mr Noonan told TDs: "I think that would give a fair shock to the system. So many people have bought diesel cars.

"I have no plans at the minute to do it but it's an interesting area of debate."